Key Terms 1. Sole Proprietorship 11. Unlimited Liability 2. Limited Liability 12. Shareholders 3 Partnership

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2 Key Terms 1. Sole Proprietorship 11. Unlimited Liability 2. Limited Liability 12. Shareholders 3 Partnership 13. Private Corporation 4 Social Responsibility A) Profit 5. Public Corporation B) Non-profit 6. Crown Corporation 14. Home Base Business 7. Co-operative 15. Globalization 8. Franchise 9. Small Business 10. Ethics

3 Types of Business Ownership Public Corporation Franchise Sole Proprietorship Cooperative Partnership

4 Advantages Owner makes all decisions, own boss Owner keeps all the profits All financial information can be kept secret Easy to start or close What are some examples of Sole Proprietorships in our area? Sole Proprietorship Disadvantages Costs and time commitment Owner has responsibility for all debt Funding difficult to obtain Responsible for all aspects of the business Doesn t have fringe benefits

5 Which Type of business is most common? Sole Proprietorships are the most common form of business ownership in Canada (74%).

6 Which type of business has the largest sales volume? Sole Proprietorships only have 9% of the sales volume. What conclusions could you draw about the relative sales and profits of sole proprietorships and corporations?

7 Advantages Co-own the business Share responsibilities Have greater financial resources Share business losses Share time commitment Partnership Disadvantages Have unlimited personal liability May have conflicts Profits are shared More difficult to close down than sole proprietorships

8 Partnerships When forming a partnerships, you need to agree on Time and money each partner will invest How profits will be shared Who will manage employees How partnership might end Partners must sign a partnership agreement Name & location of business Amount of partners investment Way profits and losses are to be divided Duties and responsibilities of each partner Procedures for ending partnership

9 1. Private Corporation Can have up to 50 shareholders (not offered to the public) May have only 1 shareholder (incorporated) Ie: Eatons Department Store 2. Public Corporation Does not have any restrictions on # of shareholders Shares can be sold to general public (bought and sold on stock exchanges Ie:McGraw-Hill Ryerson Ltd. Corporations Classified into 4 categories 3. Crown Corporations Owned by federal, provincial or municipal governments Provides special service to the public Ie: Bank of Canada, Canada Post 4. Non-profit Corporations Purpose is to undertake fundraising, research, lobby for a particular cause Ie: The United Way, Children with Diabetes

10 Structure of a large Public Corporation Owners/Shareholders (Elect board of Directors) Board of Directors (Hire Officers) Officers (Set corporate Objective & Select Managers) Managers (supervise employees) Employees

11 Public Corporation Advantages Owners are shareholders Employees hired to run company Can usually raise funds easier Have a lower tax rate Can continue to operate after death of owners Disadvantages More complicated structures Employees may not be committed to the business Annual reports have to be published secrets divulged Value of company shares may change depending on stock market

12 Cooperative Advantages Own and control business Share start up costs and running of the business Share the financial risk Disadvantages Members may not to want to invest money for expansion Making decisions may be difficult - # of members Members can have conflicts May pay less for goods and services and get more for those they sell Page 43

13 Franchise Advantages obuy a business with a good reputation ofranchisors supply training and financial knowledge ofranchisors usually provide packaging, advertising and equipment Disadvantages ocan be expensive to buy omay to follow a lot of rules laid down by the franchisors oif franchisor s business fails, so will the franchisee s business Discuss the franchises that are in your area. Are there any franchises that you think would work here? Why or why not?

14 Page 44, # s 1-5 Page 46 Kitchen Table Tycoons (Read) # s 1-3

15 Growth in Canadian Businesses Changes which have helped businesses to grow Advances in technology (information technology) Increase in global business connections Growth of small business and service sectors Greater emphasis on natural environment Focus on business ethics and social responsibility

16 Read pp Note: Technology Timeline What technologies do you expect will be developed during the next 10 years??

17 Appeal to women (career block sexual discrimination) 50% (9% of total work force) of self-employed Canadians work from their home. Why? Growth of information technology Growth of service businesses Disappearance of many traditional jobs Wanting to be own boss, change lifestyle

18 Growth of Service Sector 27% of new businesses are in the business and personal service sectors Over 75% of all jobs in Canada are in the service sector Reason for growth Canadians have more money and less time than they had 50 years ago People are willing to pay others to care for their children, plan a trip, clean their homes, etc.

19 Growing Concern for the Environment The depletion of the ozone layer Toxic waste in our water systems Huge amounts of waste and garbage

20 Business Opportunities We are encouraged to reduce, reuse & recycle many businesses are rethinking how to dispose of their garbage Environmental consultants work with many companies advising them on how to safely dispose of toxic waste products.

21 Goals of socially responsible businesses and citizens End discrimination of women & minorities in terms of hiring, promotion, salaries and firing Halt production & sale of weapons and land mines Practice sustainable development & not to allow short-term economic considerations to replace longer-term, more socially responsible considerations To end white collar crime (thefts by employees) Ensure Canadian marketplace remains fair and competitive by outlawing price fixing and bid rigging Eliminate from the global market place dangerous drugs produced by pharmaceutical companies Page 56 # s 1 & 2, Read pp do # s 1 3, Go over Chapter Review